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Dagon comments on Open thread, May 15 - May 21, 2017 - Less Wrong Discussion

1 Post author: Elo 15 May 2017 07:06AM

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Comment author: Dagon 19 May 2017 08:28:33PM 0 points [-]

I guess it's worth mentioning one common "solution": extortion/taxation. Threaten to punish people who don't pay what you think they owe. Usually combined with opacity and not telling anyone exactly how their payments are spent.

Comment author: bogus 22 May 2017 08:40:19AM 0 points [-]

This is not really a solution though, because it's not incentive compatible. There's nothing to ensure that the extortionist will spend the money on providing the desired goods, and attempts at creating such incentives must ultimately fail for the same underlying reasons as the original problem. (This is of course assuming no excludability - if a club owner can ban some members from her club and invite others to join for a fee, she is incented to manage the club to the members' benefit, for standard Coasian reasons!)

Comment author: Dagon 22 May 2017 02:00:52PM 0 points [-]

It's a solution for the extortionist, and that's who is experiencing free riding as a problem.

Threatening your housemates that you'll replace them if they don't pony up for painting or threatening jail if a resident doesn't pay taxes could be done by bad actors (and IMO often is), but that's only a difference in purpose, not in activity. Extortion is, by it's very nature, incentive-compatible with collecting revenue: its only aim is to provide incentive for the freeloaders to pay.